If you have trouble with the IRS, don’t put off a resolution

Steven Klitzner, the IRS problem resolution attorney, joined Good Morning Keys on KeysTalk 96.9/102.5FM this morning to talk about the steps to take with IRS problems. 

Klitzner’s number is 305-682-1118 and the consultation is always free. 

He said, “I used to always meet people in person but since COVID, the majority of the new folks that call me, we speak on the phone.”

It’s important to remember that time is of the essence with IRS tax problems. 

Klitzner said, “The letters that you get, many of the letters especially the certified letters give you certain rights, and those rights will expire and once they do, now you’re playing catch up. Now you’re playing defense. If you exercise your rights, you as a taxpayer can be more on the offense, nothing can happen until you resolve the case. That’s really important because if you do nothing, ultimately, the IRS is going to take action. That could be taking away your passport or not renewing your passport, it could be filing a federal tax lien, it could be taking your bank account and your wages. So you have to be very careful not to ignore and a lot of people do and I get it, it’s very overwhelming. But you have to be proactive.”

The IRS is not really known for letting people off the hook. 

Klitzner said, “Only if you can show them that this is all the money you can pay. Everyone hears about the offering compromise. Everyone wants to do it. It applies to people who, when push comes to shove, there’s no way they can pay the debt. If they have limited amount of assets, limited amount or no property. They don’t make a whole lot of money. Yes, they can settle for less. Other people that have the ability to pay, they are going to pay every single penny of it. Everybody’s got a different case.”

Klitzner’s company is able to deal with the IRS on your behalf. 

He said, “I think that’s really important. Most of those companies you hear they’re not attorneys, they give you a caseworker that may not even be a CPA or enrolled agent. They’re really good at taking your money. They’re not so good at resolving your case. When you have a local revenue officer especially, and you’ve got somebody across the country representing you or supposedly representing you, the IRS is going to take advantage. It’s really important that you have someone locally with the relationships who deals with the same people all the time, who can get your best possible deal, and is looking out for your best interest. I joke about the fact that you have one of these national companies, and Joe’s working on the case and you call the next week. It’s like, where’s Joe? Oh, Joe went to work at the mall. We just have Mary now was in the mailroom, she’s now working on your case and that’s what it is over there. A little bit different when dealing with an attorney in South Florida.”

Collections and audits are ramping up right now. 

Klitzner said, “We’re seeing more and more they’re starting to again, send out letters that they haven’t sent out in several years. These are the collection letters that people get from automated collections, which is the IRS people at the 800 number. They’re starting to take action. For a couple of years, many of my clients were under the radar. It’s not happening anymore. Here they come.”

Klitzner had a three year term with the Internal Revenue Service Advisory Council. 

He said, “I just finished my three year term and I’m going through withdrawal symptoms now. I miss it. Because I went to Washington five times a year and met with people at the IRS, I was the chair of the Small Business self employed subgroup of the IRSAC, the Internal Revenue Service Advisory Council, and I got to meet a lot of people, I really understood where the IRS is coming from. When you talk to the people at the top, they generally have some pretty good ideas how things should be done. Unfortunately, like the old game of telephone, when it trickles down to the field, the message kind of gets lost. That’s unfortunate, but they’re developing some new ways for taxpayers to work out their problems, they’re going to be better on the telephone, and be better online. They’re sending letters with QR codes now. So they’re getting sort of caught up. But a lot of times, it’s necessary to have somebody help you. If you owe a few thousand dollars and need a little time to pay it, you don’t really need me, you can do it. But when you owe a lot of money, and the IRS says, listen, we want you to sell your house or we want you to refinance this, or we want you to take your IRA, we want you to close your business, you need somebody to protect you, because in my mind, those generally aren’t the options the taxpayer wants to do.” 

Some people may think that the IRS will look negatively upon them or even sanction them if they hire an attorney, but that is not the case. 

Klitzner said, “They’re actually sometimes thrilled I’m on the case, because they’re not getting any cooperation. They’re forced to start levying because they’re not getting what they need from the taxpayer. The important thing is, once I represent somebody, they never talked to the IRS unless on a few occasions, I think it’s a good idea. But the general answer is no, they’re not talking to the IRS, and the revenue officers who handle the collection, the revenue agents who handle audits, they would rather deal with me, because we can cut to the chase and resolve the case. That’s really what they’re looking to do, resolve the case. I have to resolve it, and not set my client up for failure. If the IRS wants them to pay $2,000 a month in an installment agreement, and they can only pay $500 a month, I’ve got to make a deal my clients can afford and not to fall down in two months. So it’s not as easy as just calling them and saying, here’s what we’ll do. Everything, for the most part, requires financial information, they look at every little thing. The whole thing is they don’t want to send a message, the IRS doesn’t, that if you don’t pay your taxes, just call us and we’ll make a quick deal. They want to send the message that you need to pay your taxes on time. And that’s why they’re so difficult for the Layperson to deal with.”

It’s important to get any tax issues on track. 

Klitzner said, “There’s no question they’ll always work with you. If you’re filing your returns, whether you’re a business filing your 941, your 1120s, 940s, an individual filing their 1040s, they’ll work with you on the past stuff as long as you’re going to be good from here forward. If you’re not going to be then they don’t care what they do to you. Probably about 75 to 80% of the people that come to me have at least one unfiled returns. Some people haven’t even filed this century. And what they do, the first big mistake is they file all their returns. Well the IRS only cares about the last six years. I can’t tell you how many people come to me and say I just filed the last 10 years, I owe hundreds of thousands of dollars. And it wasn’t necessary. They only have to file the last six years. We have some plans and we have some ways we work that which is less invasive for the taxpayer, but we have to have a plan. Generally like any other problem, once you get started, once you start doing it, it doesn’t hurt as much as you thought it would, and you actually feel better.”

The consultation will give you an idea of where you’re headed. 

Klitzner said, “Sometimes people say, I don’t know this, I don’t know that. Okay, here’s what I’m going to do. I’m going to get your transcripts, and I charge an initial fee for that. Then I can give you some answers. Maybe there’ll be more of a fee, maybe less. But my ultimate fee is always the flat fee, covers everything I do start to finish because I don’t want people to think, well, what if that doesn’t work, and you have to appeal, do I have to pay more? And what if that doesn’t work? Or what if the IRS comes back in two years and wants more information? Everything is included in my fee, which is good, because it’s like divorce lawyers, they send you a bill because they work an hour and you call them, you say, why did you send me a bill, and they explain it to you, and then they send you a bill for calling them. I don’t do that. My flat fee, covers everything. I work with people on paying me. That way they know that I’m all in and I have a real interest in resolving their case.”

This can also result in having your passport being taken away. 

Klitzner said, “That’s a big thing. This is a law that’s that’s been around for several years, and they were starting to really push it and then COVID came in, they backed off, now they’re pushing it again. The amount changes every year. Right now it’s $62,000. If you owe the IRS more than $62,000, and you ignore certain letters, they can now certify your passport to the State Department. So when you try to get a new passport, you try to renew your existing passport, the State Department just keeps it. Now you have none. In some circumstances, if you don’t cooperate, they’ll actually have your passport revoked. This is not good news for taxpayers. You can’t leave the country. If you’re out of the country, and they happen to revoke it while you’re out of the country, you’re able to come back, but they won’t let you leave the country if they take away your passport. The good news is it’s a relatively simple solution. It does take a little while but we can get that certification reverseD for people and get their passport back.”

There doesn’t need to be any embarrassment here. 

Klitzner said, “Most of my clients would never dream of breaking the law in any regard. But when it comes to the IRS, this is very often their only really big problem. They just are so overwhelmed by it and it does snowball to the point where they’re losing sleep over it and they don’t know how to start. They almost want the IRS to take action to force them to do something. The important thing is once they’re proactive and once I have my power of attorney in and I get the letters they get and the phone calls they get, they can sleep at night. We have a plan to resolve it. But certainly the stigma that people think they have, I always tell them they’re not alone. There’s millions of people, most of them, I think, are in South Florida, who have IRS issues, and are still really good, upstanding, intelligent, responsible, sometimes they’re very financially well off people who just can’t get this one problem out of their mind and out of their life.”

Your accountant may not be able to handle any IRS problems. 

Klitzner said, “Most accountants aren’t. They sometimes try to help their people. I do a lot of presentations and seminars, and I teach around the country practitioners how to do this. A couple of years ago, I was doing a seminar here in Florida for a group of CPAs and the next day, one of the CPAs came to my office, I didn’t know he was coming. I welcomed him. He came into my conference room, he put two files on my conference room desk, and said, let me know and he left. Because they’re not really equipped to do this. Their practice is different than having to go toe to toe with the IRS every day. So many of my cases come from referrals from CPAs and enrolled agents and tax professionals who really don’t handle this niche.”

Remember, time is of the essence. 

Klitzner said, “Sometimes I’ll talk to someone and they’ll retain me. And they say, well, I feel great. I feel so much better. Sometimes I’ll say wait, hold on. It’s not done yet. I know you feel better, but now we’ve got some work to do. I need some information. The initial feeling is usually pretty good. But my goal is to protect people so that they can go on and live their life going forward and take care of the problem in the past so they’re not always looking over their shoulder.”

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